Supplemental John Swallow Report by Robert Gehrke

New report raises new questions about Swallow, Shurtleff

Unreleased findings » Evidence left out of the Utah House report shows more information may be missing.

First Published Apr 08 2014 10:49 pm
Last Updated Apr 11 2014 02:12 pm

An unreleased report by a pair of House investigators delves into the relationship between Jeremy Johnson and former Utah Attorneys General Mark Shurtleff and John Swallow along with the role played by the federal prosecutor who was handling the indicted businessman’s case.

The report includes a transcript of a recorded meeting between Johnson and Shurtleff, raises questions about the disappearance of potentially hundreds of other Johnson recordings and lays out a sworn statement from a lawyer who said Swallow asked him to get another $120,000 from Johnson in exchange for helping with Johnson’s legal troubles.

"Taken as a whole … the information from [the investigators’ informant] sharpens and expands the image of a politically motivated subculture in the office of Utah’s attorney general in which the parties ‘paid to play,’ " wrote Pamela Lindquist and Richard Casper, a pair of investigators hired by the House, in their 16-page supplemental report.

With a few small exceptions, the information in Lindquist’s report — which was not publicly released but obtained by The Salt Lake Tribune — was not part of the House Special Investigative Committee’s final report on Swallow’s conduct, but Lindquist said she and Casper felt they needed to provide the supplemental findings, which included a handful of audio recordings of Johnson’s meetings.

"We had to do it. There was evidence out there that wasn’t being picked up," she said in an interview Tuesday. "[The Justice Department] had done their investigation and ended it. They didn’t get any of it. The lieutenant governor’s office had opened and closed their investigation and didn’t get any of it. And the Legislature was closing their investigation."

Rep. Jim Dunnigan, R-Taylorsville, who led the House Special Investigative Committee, said there were several reasons that Lindquist’s findings didn’t make the panel’s final presentation.

"Some of the information was peripheral to our main focus, which was on Mr. Swallow," he said. "Another part was the concern that the information needed to be corroborated, and we were very concerned that we not be played by various parties or misdirected in our investigation."

Much of the information in the Lindquist report came from associates of Johnson — who sought Swallow’s help in dealing with a federal investigation into his I Works business — and there was concern on the committee, Dunnigan said, that Johnson’s allies may be trying to manipulate the investigation to benefit the St. George businessman.

Dunnigan said much of Lindquist’s information also came late in the $4 million probe, leaving little time to verify it.

"We were reluctant to just throw stuff up there without corroboration," Dunnigan said, "and some of that costs money to corroborate."

Swallow’s attorney, Rod Snow, said there is good reason that the House and its attorneys opted not to include Lindquist’s findings in their final report.

"Why does it surface now?" Snow asked. "There seems to be a lot of inaccurate information in this report and reliance on Jeremy Johnson’s allegations, which in the past have proven to be inaccurate and unreliable. Of course, there are many inferences and conclusions in the House report with which Mr. Swallow takes strong exception."

The final House report, issued in March, said Swallow hung a "for sale" sign on the attorney general’s office, offering favors to wealthy donors and friends. It also accused Swallow of destroying data and fabricating documents to cover up his relationship with Johnson.

Lindquist’s report adds to revelations of missing data, noting that a hard drive containing a slew of recordings of conversations between Johnson and other parties are now apparently missing — after they were seized by federal agents and turned over to a receiver who is handling I Works’ assets.

The supplemental report also includes excerpts of a long conversation between Johnson and Shurtleff from Oct. 8, 2012, in Shurtleff’s Utah Capitol office that Johnson apparently recorded without the then-attorney general’s knowledge.

From the context, the investigators wrote, it’s clear that people within the attorney general’s office, including Shurtleff and one of his top deputies, Kirk Torgensen, knew Swallow had helped arrange a deal to assist Johnson with his looming federal charges.

In the exchange, Shurtleff expresses concern that Swallow will be indicted after the election and "John is freaking out." Shurtleff calls Swallow a friend, but says he wants "John to do the right thing."

Shurtleff asks Johnson if he thinks Swallow kept some of the $250,000 that Johnson paid to Richard Rawle, a late payday-loan magnate.

"For sure he did," Johnson replies.

Swallow has long insisted the money was used to hire lobbyists who could get Senate Majority Leader Harry Reid’s help in putting pressure on the Federal Trade Commission.

Johnson tells Shurtleff that he has refused to cooperate with federal investigators looking at Swallow.

"The only way that [the feds] would get my cooperation was if they promised me that they were going to give John, the worst thing that could happen to John is that he doesn’t get to be A.G.," Johnson says.

"He’d be disbarred. Well, maybe not even that. I mean when you really think of it …" Shurtleff says.

"But they, the problem is, Mark, they will pursue him, they will put him in a prison, they will wreck his family, they will. They will do everything they did to me only worse," Johnson responds. "And it’s not just John, it’s far, it’s even higher than that."

"Is it me?" Shurtleff asks.

"No, no, no. It has nothing to do with you. It’s, um, Harry Reid," Johnson says. "So the deal is, you pay Harry Reid’s guy and Harry Reid makes your problems … go away. And I’m telling you, he does it. And it’s true, and it’s happened over and over again. And I saw it with the poker guys and I saw it with others."

Johnson goes on to recount the story he told Swallow in their now-infamous Krispy Kreme meeting on April 30, 2012, explaining how the Poker Players Alliance paid $2 million through intermediaries to get Reid’s help in an attempt to legalize online poker.

A Reid spokeswoman has denied any such arrangement.

At another point in the discussion, Shurtleff advises Johnson to accept a plea deal from federal prosecutor Brent Ward — who was handling Johnson’s case at the time — and then back out when he gets before a judge, claiming Ward coerced him by threatening his family.

Johnson did exactly that in January 2013, blowing up a plea deal — which included immunity for then-Attorney General Swallow — alleging he was coerced into making the agreement.

Ward’s efforts to get a job in the Utah attorney general’s office also pop up in the conversation. Emails show he had elicited Sen. Orrin Hatch’s help in getting him transferred from the Justice Department in Washington to Utah and Shurtleff tells Johnson that Ward wanted to be chief deputy attorney general (a position then held by Swallow).

"He wanted John Swallow’s job," Shurtleff says in the transcript. "He had people calling me left and right."

Lindquist’s report said Ward’s prosecution of Johnson and his desire to work in the attorney general’s office created a problem for Ward and influenced how he prosecuted the case.

Late last year, when Ward was briefly seeking to replace Swallow as attorney general, Ward said he never wanted a job in the Utah attorney general’s office.

Ward withdrew from Johnson’s case late last year. Through a spokeswoman, he declined to comment for this story.

Shurtleff, who, like Swallow, remains under investigation by Salt Lake County District Attorney Sim Gill and Davis County Attorney Troy Rawlings, declined to comment on the investigators’ report or his meeting with Johnson.

He noted that, after a subsequent meeting later in October 2012, he went to federal prosecutors and asked them to investigate the events surrounding Johnson and Swallow.

Lindquist’s report highlights a sworn declaration provided by Travis Marker, an attorney hired by Johnson and other defendants in the I Works matter to try to resolve the federal government’s claims against the company.

Marker said he had difficulty dealing with Ward, so he reached out to Swallow, meeting him twice at the cafeteria near Swallow’s Capitol office to see whether Swallow could help. Marker said Swallow told him that if Johnson could provide more money, Swallow "may have more options."

Marker said he believes Swallow requested $120,000 — he couldn’t recall the exact amount — but Johnson didn’t have the money because the FTC had frozen Johnson’s assets.

Snow acknowledged Swallow met with Marker, at Marker’s request, once or twice to discuss Johnson’s case and whether Rawle’s lobbyists might be of further assistance.

"John denies asking Marker for any monies for any purpose," Snow said. "I find it strange Marker, in his declaration, says he cannot remember an amount."

Snow said he may be confusing amounts discussed for possible restitution to the FTC with a request for payment.

"John has denied and continues to deny taking any monies paid to [Rawle] for the lobbyists retained for the FTC matter," Snow said.

The House panel included a mention of Marker’s declaration in a footnote in its final report, but said the "committee was unable to independently verify these claims."

Twitter: @RobertGehrke

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